A University of Kentucky Board of Trustees member who runs a construction company has bid on four building projects at UK since 2015 and has won one of them.
Claude “Skip” Berry III, the president and chairman of Wehr Constructors of Louisville, was appointed to the board by Gov. Steve Beshear in June 2015. That’s about the time Wehr started bidding for some of the numerous construction jobs at UK.
Wehr was the lowest bidder for the job of construction manager on a project at UK’s Good Samaritan Hospital and won the $542,000 contract. The company bid on three other projects but was not the lowest bidder and didn’t get the jobs, according to documents obtained from UK under the state open-records law.
Berry said his company, which has offices around the country, worked on the 21C Hotel in Lexington, and that’s when officials noticed the building boom at UK.
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“That’s when they started tracking the UK business,” Berry said.
Berry has followed UK’s conflict-of interest rules, which are based on state law. In each case, he sent letters to the Board of Trustees and ran a legal notice in the Herald-Leader announcing his intent to bid on a UK project. The only other requirement is that a trustee or his company must be the lowest bidder to win a bid.
Most significantly, though, trustee Berry has completely complied with both the letter and spirit of the law in question. The law is about transparency and openness to ensure there is no conflict. That’s exactly what has occurred here.
Jay Blanton, University of Kentucky spokesman
The conflict-of-interest standard is significantly higher for UK employees. According to the university’s written policy, “No employee of the university shall be directly or indirectly interested in any contract with the university for the sale of property, materials, supplies, equipment, or services, with the exception of compensation to the two faculty members and the one staff employee who are members of the board of trustees.”
Berry’s business with the university runs the risk of creating an appearance of impropriety, said political science professor and former faculty trustee Ernie Yanarella.
“We are directed not only to avoid the incidence of impropriety; it’s also demanded of us that we avoid the appearance of impropriety,” Yanarella said. “It strikes me that it behooves the university as a moral exemplar to demand of those individuals to avoid even the appearance of impropriety. I don’t know Mr. Berry; he’s jumped through all the hoops, but this suggests there is a kind of crack in the wall that should separate his function on the board from his business position.”
UK officials said the rules were created by the General Assembly, and it’s doubtful that the school could impose stricter rules on board members who are appointed by the governor and don’t work for the university.
Mistrust of government is at an all-time high, and appearances matter. Board members should not have the appearance of being swayed. Board members shouldn’t have to worry about being critical of an administration because of their own financial interest.
State Sen. Chris Harris, D-Forest Hills
UK spokesman Jay Blanton said some rules governing board members are stricter than those for employees. For example, no relative of a board member can be hired at UK, but university employees can have relatives at UK as long as they aren’t supervised by that relative.
“Most significantly, though, trustee Berry has completely complied with both the letter and spirit of the law in question,” Blanton said. “The law is about transparency and openness to ensure there is no conflict. That’s exactly what has occurred here.”
The projects that Berry bid on, including a chiller installation at UK Chandler Hospital and a restroom renovation at the Cooper Dairy Building, were approved by the board as part of much larger projects before Berry was appointed to the board. Berry said he would recuse himself from any future votes on projects in which his company might be interested.
In addition, his brother, Edward Berry, a president of Wehr’s Florida division, has handled all dealings with UK, he said. Another brother, Dale Berry, is the CEO of Wehr.
“I have my own code of ethics and integrity,” Berry said. “I would just as soon not have something if there was any hint of impropriety.”
William Harris, UK’s longtime director of purchasing, said he couldn’t recall a previous case of a trustee winning bids at UK. Steve Branscum, the owner of Russell Springs-based Branscum Construction, was on the board of trustees from 2004 to 2010 and has bid on projects since he left the board, Harris said, but Branscum didn’t make bids while on the board.
A spokesperson for Branscum confirmed that his company hadn’t made any bids during his term on the board because he considered it a conflict of interest.
Rep. Jim Wayne, D-Louisville, a member of the legislature’s Capital Projects and Bond Oversight Committee, said he thinks the General Assembly should re-examine the state law.
“Higher education has become more and more under the influence of big money and corporations, we’ve seen that at the University of Louisville, for sure,” Wayne said. “I’ve witnessed at different university environments the cosiness between contractors and the people on the board. It’s something we need to look at to make sure it’s all fine and fair.
“The universities are big business and yet they are a public trust,” Wayne said. “We need to make sure it’s fair.”
That legislative committee’s co-chairman agreed with Wayne.
“Mistrust of government is at an all-time high, and appearances matter,” said Rep. Chris Harris, D-Forest Hills. “Board members should not have the appearance of being swayed. Board members shouldn’t have to worry about being critical of an administration because of their own financial interest. Even if nothing improper is going on, the appearance of conflict of interest is enough to warrant us taking another look.”